Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/18/2019 01:30 PM JUDICIARY

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Heard & Held
-Invited Testimony Followed by Public Testimony-
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
              SB 89-LEGISLATURE: ETHICS, CONFLICTS                                                                          
1:32:43 PM                                                                                                                    
CHAIR HUGHES announced that the first order of business would be                                                                
SENATE BILL NO. 89, "An Act relating to the Legislative Ethics                                                                  
Act; and providing for an effective date."                                                                                      
1:33:31 PM                                                                                                                    
SENATOR JOHN COGHILL, Alaska State Legislature, Juneau, as                                                                      
sponsor of SB 89, paraphrased from his sponsor statement:                                                                       
      SB  89 clarifies   uncertainties    that  have  emerged  after                                                            
      the  2018   passage   of   SCS  CSSSHB   44(STA)    (known   as                                                           
      "House   Bill  44"   or  "HB  44").   Specifically,    certain                                                            
      portions   of  HB  44  eroded   Alaskans'   ability   to  have                                                            
      full,   constitutionally    required   representation    by   a                                                           
      citizen    legislature.      In    some    cases,     conflict                                                            
      provisions    are   currently     so   restrictive    that    a                                                           
      legislator   cant    live   in  "the  real   world,"   with   a                                                           
      family,   and  do  the  duties  that  they   were  elected   to                                                           
      For  example,   successful   miners   can't   carry  a  mining                                                            
      bill.  Successful    commercial   fishermen    can't  carry   a                                                           
      fishing  bill.   The alleged   "conflicted"   subject   matter                                                            
      can  only  be  discussed   in a  public  forum,   including   a                                                           
      committee   and  the   floor,  and   only  upon  declaring    a                                                           
      conflict to the legislature.                                                                                              
      In addition:   A legislator's    spouse  or immediate   family                                                            
      cannot   be   connected    to   the   alleged    "conflicted"                                                             
      subject   matter   either.  In   essence,   legislators   that                                                            
      have  a certain   expertise  in  a  field,  or that  are  most                                                            
      knowledgeable,   or  because  of  broad  family  connections,                                                             
      can't   talk   about   multiple   subject    areas   that  are                                                            
      important    to  the   state   of   Alaska,    except   under,                                                            
      essentially, unreasonably tight conditions.                                                                               
      Those    elements    combined    damage     the   legislative                                                             
      process.  Currently   there  can  be no  private  meetings   on                                                           
      any  "conflicted"     subject   matter.   There   are   severe                                                            
      restrictions   on  "official   action,"   in  multiple   forms                                                            
      (including     drafting     of    legislation      and    mere                                                            
      discussion).   A  vast   "net"  of  alleged   "conflict"   now                                                            
      exists   because    of   the   bill's    language   extending                                                             
      "conflict"   to   immediate   family   members.   "Conflicts"                                                             
      have   been   expanded    to   "financial    interests"    and                                                            
      measured against "the general public."                                                                                    
      What  are   the   proposed   changes?   1.   Definitions   are                                                            
      being  changed   back  to  the  way they   existed,  prior   to                                                           
      HB  44 (2018).   2.  The  "committee   process"   language   is                                                           
      being   removed.    3.   "Financial    interest"    is   being                                                            
      changed  to  back  to  "equity  or  ownership   interest."   4.                                                           
        eneral   public"   is   being  returned    to  "substantial                                                             
      class  of  persons  to  which  the  legislator   belongs  as  a                                                           
      member   of   a  profession,     occupation,    industry,    or                                                           
      region."   5.   There  is   an  immediate    effective   date.                                                            
      Please  join  the  Senate  Rules  Chair   in supporting   this                                                            
      necessary legislation.                                                                                                    
1:33:56 PM                                                                                                                    
CHAD  HUTCHISON,   Majority   Counsel,  Senator   John  Coghill,   Juneau,                                                      
introduced himself.                                                                                                             
1:34:12 PM                                                                                                                    
SENATOR   COGHILL   stated   the  genesis   of   SB  89.  Last   year  the                                                      
legislature    passed   House   Bill   44,   which   changed   provisions                                                       
related   to ethical   standards   of  conduct.  He  referred   to two  of                                                      
ten  sections   in  AS  24.60.030(a)-(j).    It  became   clear  that  the                                                      
bill   made  it  more   difficult   to   determine   unethical   behavior                                                       
since   the   law  extended    to   legislators'    family   members   and                                                      
private   activities,   making   the  law  ambiguous.    Legislators   who                                                      
want  to  follow  the  ethics  law  became  unsure  of  entanglement   due                                                      
to  their   knowledge   and  expertise   on  issues.   For  example,   one                                                      
legislator   who   also  works   in  the  mining   industry   has   gained                                                      
substantial   knowledge   about   the  industry.   Under   House  Bill  44                                                      
law,   this  legislator    could  not   hold  conversations    about   the                                                      
industry,   offer  amendments,    or  craft  a  bill  to  address   issues                                                      
within  the  industry   because  the  legislator   exceeded   the  $10,000                                                      
limit on earnings.                                                                                                              
SENATOR   COGHILL   explained    that   these   concerns   were   not  the                                                      
typical   ethical  concerns   but  are  ones   related  to  the  process.                                                       
The   current    ethics   law   raised    serious   doubts    about   what                                                      
legislators could do.                                                                                                           
SENATOR    COGHILL   referred    to  an   advisory    opinion   that   was                                                      
approved    in   November    [2018    by   the   Select    Committee    on                                                      
Legislative    Ethics.   He  offered    additional   examples,    such  as                                                      
legislators    whose   family   members    work   in  the   oil   and  gas                                                      
industry,   could  not   participate   in  the  bill  process   except  to                                                      
hold  public   discussions    or  vote  on  the  floor.   Instead,   these                                                      
legislators   would  need  to declare   a conflict   of interest   and ask                                                      
to  be excused  from  voting.   Again,  these  provisions   were so  broad                                                      
that  legislators   felt  the  need  to declare   a conflict   if they  or                                                      
their  family   members   were  involved   in or  had  knowledge   of  any                                                      
industry in Alaska, he said.                                                                                                    
1:37:39 PM                                                                                                                    
SENATOR  COGHILL   referred   to SB  89  to AS  24.60.030(f)-(g),    which                                                      
reset  the  standards  of  conduct  and  reverts  to  the pre-House   Bill                                                      
44  ethics  law.   It would   remove  the  language   related   to  family                                                      
members.  He  explained   that  under  House  Bill 44  law,  a legislator                                                       
might   later   find  out   that  a   family   member   had  earnings   of                                                      
$10,000   or  more  on  an issue   that  came  before   the  legislature,                                                       
making  the  legislator   "unethical"    after  the  fact.  Under  SB  89,                                                      
if  legislators    are  seeking   employment   or  acquire   benefits   or                                                      
losses,   they  can  declare  a  conflict   of  interest   and  ask  to be                                                      
excused   from   voting.   Post-House    Bill   44  law   extends   beyond                                                      
identifying   unethical   behavior  and  created  a  process  that  lended                                                      
doubt  about   whether  legislators    were  following   the  ethics  law.                                                      
The ethics law is designed to promote public trust, he said.                                                                    
He  clarified  that  SB  89  would  not rewrite   the  entire  Ethics  Act                                                      
but  would  revert  to  ethics  language   that  would  clearly  identify                                                       
conflicts   of interest.   He  acknowledged   that  the  legislature   may                                                      
decide  to  revise  the  standard   of  conduct  code  at  a  later  date.                                                      
He  characterized     SB  89  as   a  discrete    reset  that   clarifies                                                       
ethical   behavior.   He emphasized    that  legislators   want  to  serve                                                      
the  public   and  uphold  the  highest   standards.   He  said  that  his                                                      
staff will explain how the bill accomplishes this.                                                                              
1:40:35 PM                                                                                                                    
SENATOR   KIEHL  asked  for  further   clarification   on  the  change  in                                                      
SENATOR  COGHILL   said that  SB  89 reverts   to pre-House   Bill  44 law                                                      
to  address  conflict   of  interest   disclosures   within   a committee                                                       
and  on  any   floor  vote.   He  said   it  is  very  important    before                                                      
official   action  occurs   that  any  disclosures   are  made,  which  is                                                      
the floor vote.                                                                                                                 
1:41:56 PM                                                                                                                    
SENATOR   REINBOLD  referred   to  page  2,  line  16,  of  SB  89 to  the                                                      
language   "shall  not  vote"  instead   of  "shall  declare   a conflict                                                       
of interest." She asked whether this is the intent.                                                                             
SENATOR  COGHILL   answered   that  Section  2 pertains   to  the  Uniform                                                      
Rules    of   the   Alaska    State   Legislature     and   states    that                                                      
legislators   may   not  vote  if  they  have   an  equity  or  ownership                                                       
interest   in  an   issue  that   is  beyond   a  substantial    class  of                                                      
people.  For  example,  if  a legislator   is  the only  one  receiving   a                                                     
pay  raise   or  obtaining   a  contract,   he/she   may  not   vote.  The                                                      
legislator   must  stand  up  on  the  floor,  state  the  conflict,   and                                                      
make  a motion  to  be excused   from  voting.  It is  up to  the  body to                                                      
excuse the legislator from voting, he said.                                                                                     
He  deferred  to  Chad Hutchison   to  provide  reasons  why  legislators                                                       
should  vote  even   when  the  perception   of a  conflict   of interest                                                       
exists.    He   said    it   really    comes    down   to    legislators'                                                       
constitutional     duty    to   represent     their   constituents     and                                                      
determine   when  they  have   a real  conflict   of  interest.   He  said                                                      
that   the  "perceived    conflict"   is  a   bigger  problem    than  the                                                      
actual   conflict.   He  said  that   having  a  motion   in  front  of   a                                                     
committee   could  create   a "perceived   conflict."   He  said  that  SB                                                      
89 would like to return it to a real conflict.                                                                                  
1:43:56 PM                                                                                                                    
SENATOR   REINBOLD   said  it  could  be  viewed   as  strengthening   the                                                      
ethics law.                                                                                                                     
SENATOR   COGHILL  said  that  if  legislators   have   a real  conflict,                                                       
they  should  not  be  allowed   to vote.   He said  the  distinction   is                                                      
if  the individual   benefit  is  greater  than  the  group  benefit,  the                                                      
legislator   should   not  vote.  He  said  that  it  typically   has  not                                                      
happened   in  the   legislature.   However,    the  current   law  is  so                                                      
ambiguous   that  it creates   perceived   conflicts.   He said  that  the                                                      
pre-House   Bill 44  law  has been  tested  in  the  Select  Committee  on                                                      
Legislative     Ethics.    It   makes    everyone    think   about    real                                                      
conflicts, he said.                                                                                                             
1:45:38 PM                                                                                                                    
CHAIR  HUGHES  said  she  understands   that  the bill  drafters   did not                                                      
realize  how  the  ethics  law  would  be interpreted   under  House  Bill                                                      
44  law.   She  asked  whether   the   sponsor  was   aware  of  specific                                                       
problems   during   his  tenure   in  the  legislature.   She   hoped  for                                                      
reassurances   that  problems  would  not  be  bubbling  up  if this  bill                                                      
SENATOR  COGHILL   explained  that  Alaska  has  a citizen   legislature,                                                       
comprised   of   legislators   with   backgrounds    as  pilots,   in  law                                                      
enforcement   or  the military.   They  work  as teachers,   accountants,                                                       
and  lawyers.   He  worked  in  a  Christian   counseling   position,   he                                                      
said.  He  identified   potential   personal   conflicts.   For  example,                                                       
if  his pay  was  increased   or his  position   was  guaranteed,   and he                                                      
did  not  declare  a conflict,   it  would  be unethical.   He  said  if  a                                                     
legislator   was a  teacher  who  worked  in  a school  that  was  singled                                                      
out  for   raises,  that   would  be   a conflict    and  the  legislator                                                       
should   be   excused    from   voting.   However,    it  would    not  be                                                      
unethical   if a  legislator  is  a teacher   and generally   spoke  about                                                      
[issues  that  affect  schools]   or if  someone  worked  in  an industry                                                       
and  discussed  issues   related  to the  industry   without  obtaining   a                                                     
specific    benefit.   In   those   instances,   the   legislator    would                                                      
declare   the  perceived   conflict,   and   the  body  would   allow  the                                                      
legislator   to vote.  During   his 20  years  serving  as  a legislator,                                                       
many  perceived  conflicts   have  been  declared.  However,   no  one has                                                      
had  a   specific   cost  or   benefit   that   prevented   him/her   from                                                      
voting.  Alaska   has unique  geographical    fisheries  and  some  people                                                      
believe  that  legislators   who  commercially   fished  had  a conflict,                                                       
but   the  issues    were   broadly   discussed,    and  they   were   not                                                      
prevented   from   voting.   In  Alaska,   many  legislators    come  from                                                      
industries    or  enterprises    that   are  impacted   by   legislation,                                                       
including   shipping,    fishing,   schools,   and   legal   professions.                                                       
These  legislators    bring  their  expertise   gained   from  working  in                                                      
their   respective    fields,   but  unless   they   obtain   a  specific                                                       
benefit  that  exceeds   the  benefit  others  in  the  industry   obtain,                                                      
they do not have a conflict of interest.                                                                                        
1:48:59 PM                                                                                                                    
SENATOR  MICCICHE   said  it goes  beyond  the  industry  to  obtaining   a                                                     
benefit   not  given  to  "a  substantial   class  of  persons   to  which                                                      
the  legislator   belongs."   He said   that  he has  worked   in the  oil                                                      
and  gas   industry   and  in  the  fishing   industry.   He  has   always                                                      
declared   a perceived   conflict  of  interest  when  matters  affecting                                                       
those  industries    are  being  voted   on.  However,   the  legislature                                                       
has  rulings   from  [the  Select   Committee   on  Legislative    Ethics]                                                      
that  they  were  acting   on behalf   of a  substantial   class  and  not                                                      
as  individuals.    He  said   that  ethics   should   not  be   based  on                                                      
whether   legislators   like  the  outcome,   but  rather   if  they  have                                                      
real conflicts of interest.                                                                                                     
1:49:57 PM                                                                                                                    
SENATOR  COGHILL   agreed.  He  said that  SB  89 brings  the  definition                                                       
back  to "a  substantial   class."  Currently,   a conflict   of interest                                                       
could   be  related   to  an  involvement    in  a  business,   property,                                                       
profession,   private  relation,   or  a source  of  income  that  results                                                      
in  the  legislator   receiving   or  expecting   to  receive   a  benefit                                                      
greater  than  the  general   population.   He offered   his  belief  that                                                      
this  would  likely  put  most  legislators   in a unique   circumstance.                                                       
He  emphasized   that  the language   needed  to  be changed   to  greater                                                      
than  the  effect  on  "a substantial   class  of  persons  to  which  the                                                      
legislation    belongs  as   a  member  of  a  profession,    occupation,                                                       
industry,   or  region"].    He  emphasized   the   need  to  remove   any                                                      
ambiguity   in the  ethics  law.  He  characterized   House   Bill  44 law                                                      
as one that created unintended consequences.                                                                                    
1:51:26 PM                                                                                                                    
MR.  HUTCHINSON   said  he would   discuss  some  constitutional    issues                                                      
that  have   arisen  since   House  Bill   44 law   was  implemented.   He                                                      
pointed   out  that  during   the  committee   process   last   year,  Mr.                                                      
Wayne recognized constitutional issues with House Bill 44.                                                                      
1:52:24 PM                                                                                                                    
MR. HUTCHINSON reviewed slide 2.                                                                                                
      To be clear: This bill does not repeal the majority of                                                                
      the ethics legislation (House Bill 44)(2018) passed                                                                       
      last year                                                                                                                 
1:52:28 PM                                                                                                                    
MR. HUTCHINSON paraphrased slide 3.                                                                                             
      The following remains intact:                                                                                         
         trianglert Prohibitions on expenditures and contributions by                                                           
            foreign-influenced corporations and foreign nationals                                                               
            in state elections.                                                                                                 
         trianglert Limitations on member travel.                                                                               
         trianglert Per diem restrictions                                                                                       
         trianglert The Legislative Council's ability to adopt policy on                                                        
            per diem and moving expenses.                                                                                       
         trianglert Lobbyist restrictions on buying food and beverages for                                                      
            members or staff.                                                                                                   
         trianglert Gift restrictions to members                                                                                
He  noted  that  the  gift  restrictions   to  members   of $250  or  more                                                      
was not included in House Bill 44, but it still remains intact.                                                                 
1:53:03 PM                                                                                                                    
CHAIR  HUGHES  said  she  wanted  the  record  to  reflect  she  is  eager                                                      
to  fix the  issues  with  the  ethics  law  that  have  impacted   her so                                                      
1:53:22 PM                                                                                                                    
MR. HUTCHINSON turned to slide 4, "What this bill does:"                                                                        
      Simply resets the conflict provisions to the way they                                                                     
      were prior to House Bill 44                                                                                               
1:53:37 PM                                                                                                                    
MR.   HUTCHINSON    turned   to  slide   5,   "Noteworthy:      How   many                                                      
Constitutional    Issues    Have   Emerged   Because   of   the  Conflict                                                       
Provisions of HB44 (2018)?"                                                                                                     
            trianglert Alaska Constitution  - Article II                                                                        
            Legislature -  Diminishment of Core Legislative                                                                     
            Functions and Representation                                                                                        
               trianglert Example:  Successful miners can't talk  or  meet                                                      
               ("official   action")    about   mining   legislation    in                                                      
               private.      In   addition,   the   miner    can't   carry                                                      
               legislation.    Successful   commercial   fishermen/women                                                        
               can't  talk   about   commercial    fishing   in  private.                                                       
               The fishermen/women can't carry legislation.                                                                     
            trianglert Federal Constitution - First Amendment                                                                   
            Fundamental Right                                                                                                   
                trianglert Freedom of Speech for legislator and                                                                 
                trianglert Right to assemble                                                                                    
                trianglert Right to petition the government for redress                                                         
           trianglert Alaska Constitution  Article I, Sections 1, 5, &                                                          
                trianglert Article 1, Section 1  "Equal Rights"                                                                 
                trianglert Article 1, Section 5  "Freedom of Speech"                                                            
                trianglert Article 1, Section 6  "Freedom to Assemble and                                                       
He  said  that  there  are a  number  of  constitutional   problems   with                                                      
the   conflict    provisions.     He   said    this   slide    lists   the                                                      
fundamental   rights,   which  can  be restricted,   but  the  government                                                       
can  only  do  so if  it  is  necessary  to  a  compelling   governmental                                                       
interest   and the  restriction   is  narrowly   tailored  for  the  least                                                      
restrictive alternative.                                                                                                        
MR.   HUTCHINSON   referred    to  the   State   of  Alaska   v.   Planned                                                      
Parenthood   case  in  2007.  He  said  that  the  Alaska  Supreme   Court                                                      
extensively discussed this issue.                                                                                               
He  pointed   out  the   list  of  fundamental    rights  on  the   slide,                                                      
beginning   with   the  diminishment   of  core   legislative   functions                                                       
and  representation.   He  said  that  the legislators   need  to  be able                                                      
to talk to their constituents.                                                                                                  
MR.  HUTCHINSON   said  that  Article   I of  the  U.S.  Constitution   is                                                      
the  most   important   section   from   the  constitutional    founders'                                                       
perspective.   Any  restriction   of Article   II rights  granted   by the                                                      
U.S.  Constitution,   such  as  voting  or  freedom  of  speech,  must  be                                                      
the  least  restrictive   alternative.    When  legislators   cannot  talk                                                      
to  certain  constituent   groups  on  legislation   or potential   bills,                                                      
based  on  their   background   or  the  constituents'    background,   it                                                      
represents   a major  constitutional    violation.   For example,   one of                                                      
the  reasons   Senator  Coghill   got  elected   may  be  because  he  has                                                      
expertise    in  placer   mining.    However,   he   cannot   speak   with                                                      
constituents    on  these   matters   or  propose   legislative    changes                                                      
under  the  current  legislative   ethics  law.  Instead,   he must  shift                                                      
the issue to someone else who may not have the background.                                                                      
He  said that  the  14th  Amendment  contains   a due  process  provision                                                       
and  any infringement,    such  as liberty,   must be  narrowly  tailored                                                       
in the least restrictive alternative.                                                                                           
MR.  HUTCHISON   reviewed   the issues   listed  on  slide  5  related  to                                                      
the  Alaska   Constitution.   He  said  that   Article  1  provides   that                                                      
similarly   situated    people   cannot   be  treated   differently.    He                                                      
highlighted   that  people  from  the  travel  industry  wanted  to  speak                                                      
with  a  legislator,    but  due  to  the  connection   to  an  immediate                                                       
family   member,   the  group  cannot   meet  with   the  legislator.   He                                                      
emphasized   that  it  is  too  broad,  and  not  the  least  restrictive                                                       
alternative.   He  cautioned  members   to consider   these  factors  when                                                      
amending this bill.                                                                                                             
1:57:50 PM                                                                                                                    
MR.   HUTCHINSON     reviewed    slide   6,     Section    1   amends   AS                                                      
         trianglert How does it exist under HB 44 (2018)?                                                                     
               trianglert Currently, a legislator can only take official                                                        
                 action on an alleged "conflicted bill" in public                                                               
                 discussion or debate (including in committee and                                                               
                 on the floor).                                                                                                 
               trianglert In addition, the legislator is "conflicted" if                                                        
                 the  subject  matter   is connected   to the  legislator                                                       
                 (or   the  legislator's    immediate    family)   if  the                                                      
                 legislator    (or  the  immediate    family)   made  over                                                      
                 $10,000 in the immediate 12-month period.                                                                      
               trianglert The practical result?                                                                                 
                    trianglert No private meetings about the "conflicted"                                                       
                       subject matter.                                                                                          
                    trianglert A severe restriction on official action, in                                                      
                       multiple forms (drafting of legislation,                                                                 
                       discussion, etc.)                                                                                        
                    trianglert A vast "net" of "conflict" because of the                                                        
                       extension to the immediate family.                                                                       
               trianglert See Advisory Opinion 18 05 for more information.                                                      
He  said   it  is  noteworthy   that   the  sponsor   of  House   Bill  44                                                      
provided   a  chart  that   had  two  states  with   more  than  $10,000,                                                       
including   Michigan   and  Texas   with  $25,000   as  their  threshold.                                                       
There  was  an  acknowledgement    that  a wide  scope   exists  for  what                                                      
constitutes    "conflicted"   such   as  a  percentage   of  a  financial                                                       
interest   in  a   particular   business.   Under   the   Alaska   Supreme                                                      
Court   interpretation   of   fundamental   rights,   it's  important   to                                                      
consider   whether  $10,000,   the  immediate  12-month   period,   or the                                                      
expansion   to include   family  members   is truly   least  restrictive.                                                       
He  suggested  these  things  will  be  debated  by  legislators   through                                                      
the committee process.                                                                                                          
MR.  HUTCHINSON    said  the   practical   result   of  [House   Bill  44]                                                      
means   that  no   private   meetings   can   be  allowed.   It  severely                                                       
restricts   official    action,   including   drafting    legislation   or                                                      
amendments.   Further,   the  net  of  conflict   has  been   extended  to                                                      
include    family   members    and   is   not   the   least   restrictive                                                       
alternative, as compared to pre-2018 law, he said.                                                                              
1:59:40 PM                                                                                                                    
MR.   HUTCHINSON    reviewed    slide   7,   "What   are   the   proposed                                                       
               trianglert The language is returned to the language used                                                         
                 before 2018, prior to the passage of HB 44.                                                                    
             trianglert This includes the following:                                                                            
                          trianglert The language is returned to "unless                                                        
                             required by the Uniform Rules of the                                                               
                             Alaska State Legislature."                                                                         
                          trianglert Passages that restrict    legislator                                                       
                             advocacy to only narrow avenues of                                                                 
                             public     discussion     or    debate    are                                                      
                          trianglert The language re: "immediate family" is                                                     
                          trianglert The income threshold of "$10,000" for                                                      
                             the "preceding 12-month period" is                                                                 
He  pointed  out  the  bill  would  return  to  the language   in  Uniform                                                      
Rule  34(b).   He  pointed  out  that  Mason's   Manual   rules  are  also                                                      
tied  to  this  rule.  He  suggested   reviewing   Sections  24,  522  and                                                      
560  of  Mason's   Manual.  He  referred   to  Advisory   Opinions   0402,                                                      
0801,   1105,  and   1301  to   provide   interpretations    of  conflict                                                       
prior  to  passage   of  House  Bill  44  in  2018.  He  emphasized   that                                                      
concern   about   extending    conflicts    to  legislators'    immediate                                                       
family  and  the  $10,000  threshold   exist  because   they  are not  the                                                      
least    restrictive    alternatives.     Other    states   have    higher                                                      
thresholds and these issues must be debated.                                                                                    
2:01:12 PM                                                                                                                    
MR.   HUTCHINSON    reviewed   slide    8,  "Section    2   -  Amends   AS                                                      
         trianglert How does it exist under HB 44 (2018)?                                                                     
               trianglert Currently, conflicts (which are expanded) have to                                                     
                 be declared in the committee process and the                                                                   
               trianglert Conflicts are expanded to "financial interests"                                                       
                 of  a  business,   investment,   real  property,   lease,                                                      
                 or  other   enterprise.     There  is  an  expansion   to                                                      
                 measuring    the   "interest"   against    "the   general                                                      
               trianglert The practical result?                                                                                 
                    trianglert Discussion on relevant issues is severely                                                        
                    trianglert Conflicts will have to be declared in the                                                        
                       committee   process.     If there   is  an  alleged                                                      
                       "conflict,"    there   are   legitimate   concerns                                                       
                       about   passing   otherwise   viable   legislation                                                       
                       from  the  committee   because   members  would  be                                                      
                       barred   from   private   discussion   on   certain                                                      
                    trianglert A broadening of the "scope of conflict" cast                                                     
                       a "wide net."                                                                                            
2:02:38 PM                                                                                                                    
MR. HUTCHINSON turned to slide 9, "What are the proposed                                                                        
               trianglert The committee process" language is being                                                              
               trianglert "Financial interest" is being changed to back to                                                      
                 "equity or ownership interest."                                                                                
               trianglert "General public" is    being     returned     to                                                      
                 "substantial class of persons to which the                                                                     
                 legislator belongs as a member of a profession,                                                                
                 occupation, industry, or region.                                                                               
2:03:16 PM                                                                                                                    
MR. HUTCHINSON reviewed slide 10, "Section 3 simply repeals AS                                                                
24.60.030(j)(2) and 24.60.990(a)(6)."                                                                                           
      AS 24.60.030(j)(2) says:                                                                                                  
                 "substantially benefit or harm" means the                                                                      
      effect  on the  person's                            financial                                                             
      interest   is greater   than  the  effect   on the  financial                                                             
      interest                     of  the  general  public   of the                                                            
   trianglert This language is being removed.                                                                                   
        trianglert Reasoning:                                                                                                   
               trianglert Clarifies uncertainty.                                                                                
               trianglert Fairly easily, a legislator can   have   an                                                           
               alleged   "substantial"   "financial    interest"   in                                                           
               a  specific   area  that's   greater   than  most   of                                                           
               the  general  public  of  the  state.   The  spectrum                                                            
               is   wide   as  it   can  pertain    to  businesses,                                                             
               investments,     real    property,     leases,    or,                                                          
               broadly, other enterprises.                                                                                    
               trianglert Since the language of "general public" in AS                                                          
               24.60.030(g)     is    being    changed     back    to                                                           
                  ubstantial   class   of  persons   to   which  the                                                            
               legislator     belongs     as   a    member    of    a                                                           
               profession,    occupation,   industry,   or  region,"                                                            
               this passage is appropriate for removal.                                                                         
2:04:07 PM                                                                                                                    
MR. HUTCHINSON reviewed slide 11, "Section 3 - Continued                                                                        
         trianglert AS 24.60.990(a)(6) says:                                                                                    
                 "financial interest" means ownership of an                                                                     
interest or an involvement in a                           business,                                                             
including a property ownership, or a professional or private                                                                    
                             relationship, that is a source of                                                                  
income, or from which, or as a result of                                                                                        
      which, a person has received or expects to receive a                                                                      
financial benefit.                                                                                                              
               trianglert This language is being removed.                                                                       
                    trianglert Reasoning:                                                                                       
                          trianglert Since the language of "financial                                                           
                             interest"    is   being    changed    in   AS                                                      
                             24.60.030(g)      back    to    "equity    or                                                      
                             ownership   interest,"   this  provision   is                                                      
                             being removed.                                                                                     
2:04:41 PM                                                                                                                    
MR. HUTCHINSON reviewed slide 12, titled "Section 4."                                                                           
   trianglert Section 4 makes the act effective immediately.                                                                    
2:04:57 PM                                                                                                                    
MR. HUTCHINSON turned to slide 13, "This clarification attempts                                                                 
to find the right balance."                                                                                                     
   trianglert High moral and ethical standards among public servants                                                            
      in  the legislative    branch  are  essential   to government                                                             
      trust,  respect,   and  confidence   of  the  people  of  this                                                            
      state.   See   Advisory   Opinion    19-01.     See   also   AS                                                           
   trianglert Right of members to represent their constituencies is                                                             
      of such  major  importance   that  members  should  be  barred                                                            
      from   their   constitutionally    required    representative                                                             
      duties only in clear cases of personal enrichment.                                                                        
      Members  are  encouraged    to  review  Uniform   Rule  34(b),                                                            
      Mason's   Manual   of  Legislative   Procedure   at   sections                                                            
      241,   522,  560,   Advisory    Opinion   2004-02,    Advisory                                                            
      Opinion    2008-01,    Advisory     Opinion    2011-05,    and                                                            
      Advisory    Opinion    2013-01    for   interpretations      of                                                           
      conflict prior to 2018                                                                                                    
2:05:48 PM                                                                                                                    
MR. HUTCHINSON turned to the final slide, slide 14, "Questions?"                                                                
2:05:55 PM                                                                                                                    
SENATOR   KIEHL  said  he  was  unsure  of  some  of  the constitutional                                                        
arguments,   especially   in  terms  of  the  least  restrictive    means.                                                      
The  legislature   is exempt  from  the  Open  Meetings  Act,  which  is  a                                                     
set  of rules   imposed  on  the  executive  branch,   school  districts,                                                       
and  municipalities.    It is  vastly  more  restrictive   than  anything                                                       
the  legislature   is  operating   under.   He  asked  whether   the  Open                                                      
Meetings Act is unconstitutional.                                                                                               
MR.    HUTCHINSON     explained     that    what     he   can    say    is                                                      
unconstitutional    is   when  constituents    cannot   meet  with   their                                                      
legislators   because  of  conflict  provisions   related   to House  Bill                                                      
44   law.    That    is   unconstitutional      because    it   prohibits                                                       
legislators   who  have  a similar   background   from  participating   on                                                      
an  issue,  whether  it  is mining  and  the  legislator  is  a miner,  or                                                      
fishing   and   the   legislator    is   a  fisherman.    He   said   that                                                      
commenting   on  the  Open  Meetings  Act  is  beyond  the  scope  of  his                                                      
testimony    today.   He  emphasized    that   infringements,     such  as                                                      
constituents   not  being  able  to meet  at  any level  with  their  duly                                                      
elected   representatives    due  to  a  conflict   provisions   that  are                                                      
too strict is a violation.                                                                                                      
2:07:24 PM                                                                                                                    
SENATOR   KIEHL   turned  to   disclosure.   He  asked   whether   he  was                                                      
arguing that constitutional issues exist with disclosure.                                                                       
MR.  HUTCHINSON   answered  that  is  correct.  It  has  to be  the  least                                                      
restrictive   alternative   in  terms  of  disclosures.   He  pointed  out                                                      
the  sponsor   of  House   Bill   44  law  presented   information    that                                                      
indicates   other  states   disclosure   levels  are  much  higher,   with                                                      
Texas  and  Michigan   at  $25,000.   In  addition,   the  scope  of  what                                                      
qualifies   as immediate   family   is much  more  limited.   The  problem                                                      
in  Alaska  is  that the  scope  is  broadened   so much  it  essentially                                                       
prohibits   people  from  talking   to their  legislators    and violates                                                       
Article   I  and  Article  II  of  the  Constitution    of  the  State  of                                                      
SENATOR  KIEHL  pointed   out that  disclosure   does  not  have anything                                                       
to  do with  who  legislators   can  talk  to  or  what  meetings   can be                                                      
held.  He  acknowledged   he  is  not  an attorney,   but  he  was  pretty                                                      
sure  that  "least   restrictive"   does  not  mean  that  [Alaska]   must                                                      
adopt  the  highest   state   threshold   for  dollar  amounts.   He  said                                                      
that    the   public     official    financial     disclosures     require                                                      
disclosure   threshold  of  $1,000.  He  asked  whether  those  reporting                                                       
requirements are unconstitutional.                                                                                              
MR.  HUTCHINSON   related   his  understanding    he  was  talking   about                                                      
disclosures.   He  clarified   that  he  is  not  discussing   the  Alaska                                                      
Public    Offices   Commission    disclosures     that   candidates    and                                                      
legislators    must   file,  although    they   coalesce,   but   this  is                                                      
something   different.   He  explained   that   if  the  monetary   amount                                                      
affects   your  immediate    family   and  that  creates   such   a  broad                                                      
scope  of  conflict   that  legislators   are  prohibited   from   talking                                                      
with  representative    groups  that  may  have  the same  background   as                                                      
your  wife,  husband,   or immediate   family,   it raises  the  issue  as                                                      
to  whether   it  is  truly   the  least  restrictive    alternative.   He                                                      
offered   his  belief   that   this  will   be  an  ongoing   debate.   He                                                      
argued  that  the  legislature   operated  for  years  [prior  to  passage                                                      
of  House  Bill  44] so  it  obviously  was  not  the  least  restrictive                                                       
2:10:13 PM                                                                                                                    
SENATOR   REINBOLD    pointed   out  she   served   on  the   Legislative                                                       
Ethics  Committee   when  the two  advisory   opinions  were  issued.  She                                                      
said  she   thought  they   went  far  beyond   [the  least   restrictive                                                       
alternative],    and  she  was  pretty   frustrated   with  the  advisory                                                       
opinions.   In  fact,  she  was  a dissenting   vote.   She  recalled  the                                                      
opinion  would  impact   legislators  who  belonged   to a  union,  Native                                                      
organization,    fishing   group,   oil  and  gas  industry,    or  health                                                      
care.  She  anticipated   that  it would  affect  every  legislator.   She                                                      
acknowledged    the  public   wants  ethical   legislators,    but  if  it                                                      
creates   barriers    for  constituency    groups   concerned    about  an                                                      
issue important to the district, it is problematic.                                                                             
2:11:51 PM                                                                                                                    
CHAIR HUGHES opened public testimony on SB 89.                                                                                  
2:12:15 PM                                                                                                                    
VIKKI  JOE  KENNEDY,   representing    herself,   Kodiak,  urged   members                                                      
to  stay accountable   and  ethical.  She  stated  that  she  has  been in                                                      
Juneau  for  the  last  fifteen   months.  She  said  she  was  in  Juneau                                                      
when  House   Bill  44  passed  the  legislature   last   year.  She  said                                                      
that  any  bill that  holds  everyone   accountable   and cautious   about                                                      
ethics  is  a  good  thing.  She  was  told   in January   she  could  not                                                      
talk  to  a senator.   She  said  when  legislators   sit  on  boards  and                                                      
legislators   can  financially   benefit   [from  decisions   made  by the                                                      
board],   it could   be an  issue.   She  said  she  has  seen  "a lot  of                                                      
fine   things"   happening   [in  the   legislature],    but  she   thinks                                                      
strictness   makes  everyone  "stay  aware".   She said  she  has  carried                                                      
a  copy  of  the  [Constitution    of  the  State  of  Alaska]   with  her                                                      
since   she   arrived    in   Alaska.   She   urged    members   to   stay                                                      
accountable   and  ethical.   She  said  she  appreciates   the  work  the                                                      
committee was doing on SB 89.                                                                                                   
2:14:02 PM                                                                                                                    
CHAIR HUGHES closed public testimony on SB 89.                                                                                  
2:14:19 PM                                                                                                                    
SENATOR    KIEHL   referred   to   language    being   repealed    in  the                                                      
definition    section   of  the  ethics   law.   He  said   that   deletes                                                      
language   [in   AS   24.60.990(a)(6),    "financial    interest"    means                                                      
ownership    of  an  interest    or  an   involvement    in  a  business,                                                       
including   a  property   ownership,    or  a  professional   or   private                                                      
relationship,   that  is  a source  of  income,  or  from which,   or as  a                                                     
result  of  which,  a  person  has  received   or  expects  to  receive   a                                                     
financial   benefit.]   He read   the  language,  "from   which,  or  as  a                                                     
result  of  which,  a  person  has  received   or  expects  to  receive   a                                                     
financial   benefit."   He   asked  if  SB  89  were   to  pass,   whether                                                      
legislators   would   not need   to disclose   any  "hefty"   increase  or                                                      
benefit  they  received   from  a program  implemented   via  legislative                                                       
MR.  HUTCHINSON   said  he  thought   the  person  would   be  subject  to                                                      
APOC,  depending   on  the  amount.   He  said  that   advisory  opinions                                                       
required   certain  disclosures   must  occur.  There  have  been  ethical                                                      
rulings   on  a  case-by-case    basis   on  whether   it  represented    a                                                     
substantial   interest.   He  stated,  informally,   that  anything   over                                                      
$250  is  generally   interpreted   as  a substantial    interest  by  the                                                      
Legislative    Ethics   Committee.    He  presumed   that   if   it  is   a                                                     
significant   amount,  it  must  be disclosed   on the  legislative   APOC                                                      
reports.  He  emphasized   that  this bill  does  not  change  any  of the                                                      
APOC  reporting   requirements,    but  it  ensures   that  the  scope  of                                                      
influence   is  not  expanded  so  much  that  people   cannot  meet  with                                                      
certain   groups  since   they  have  common   ties  or  their  immediate                                                       
CHAIR  HUGHES  asked   the legislative   legal   counsel  if  anything  in                                                      
SB  89  changes   what   must   be  disclosed   in  the   APOC  financial                                                       
2:16:54 PM                                                                                                                    
DAN  WAYNE,   Attorney,    Legislative    Legal   Services,   Legislative                                                       
Affairs  Agency,   Juneau,  answered   that  it  does not.  He  said  that                                                      
SB  89 changes   what  must  be  disclosed   on the  floor,  but  not  the                                                      
financial disclosures under AS 24.60.200.                                                                                       
SENATOR  KIEHL   clarified  his  question,   that  if it  is  not  through                                                      
an  equity  interest   in  a  business  or  real  estate,   but  it  would                                                      
enhance   his  finances,   whether   he  would   not  have   to  rise  and                                                      
declare [a conflict of interest on the floor.]                                                                                  
MR.  WAYNE   interpreted   the  bill   to  mean  that  the  income   could                                                      
fall   under   "other   enterprise"   or   "business,   investment    real                                                      
property,   or  lease."   If   it  did  not  fall   under  one   of  those                                                      
categories,   then  Senator  Kiehl  is  correct  that  it would  not  need                                                      
to be disclosed or require requesting to abstain from a vote.                                                                   
CHAIR  HUGHES  asked  under   SB 89,  if  it were  to  pass,  whether  the                                                      
disclosure   would   only  apply  if   it gave   that  person   a  benefit                                                      
beyond the people in that industry or class or region.                                                                          
MR.  WAYNE   answered   that  is  correct.   He  directed   attention   to                                                      
lines   23-24,   "a  substantial    class   of   persons   to  which   the                                                      
legislator    belongs   as  a  member   of  a  profession,    occupation,                                                       
industry,   or  region   class  of  persons."    He  said  that  language                                                       
would  modify  part  of  the  sentence  before   that  language,  that  it                                                      
is  all part  of  one  calculation.   He said  that  at  the  end of  that                                                      
calculation   the   legislator   would  need   to determine    whether  to                                                      
disclose a conflict or request to abstain.                                                                                      
2:19:09 PM                                                                                                                    
SENATOR    MICCICHE   said    that   the   conduct   Senator    Kiehl   is                                                      
describing   would  either   be  bribery  or  else  the  legislator   must                                                      
report  it  as  a  conflict   of interest.   He  clarified   that  if  the                                                      
legislator   was the  only  one  receiving  the  benefit  or  the  benefit                                                      
is  separate   from  the   substantial   class,   it  represents   a  true                                                      
conflict   that  must  be declared,   and  the  legislator   cannot  vote.                                                      
Legislators   still   must  declare   any  perceived   conflicts   so  the                                                      
whole  world  has  knowledge.   For example,   if he  owned  rental  units                                                      
and  a  bill   came  before   the   legislature   related   to  landlord-                                                       
tenant   rights,  he  would   declare  a  perceived   conflict   prior  to                                                      
voting  on  the  measure   even  though  the  law  would  affect  him  the                                                      
same  as  anyone  else  who  is  a landlord.   Therefore,   he  would  not                                                      
have  a true  conflict   of interest   and would  be  allowed  to  vote on                                                      
the bill.                                                                                                                       
2:21:04 PM                                                                                                                    
MR.   WAYNE   said   that  he   appreciates    that   clarification.    He                                                      
related   a scenario   in  which  a legislator   is  not  being  paid  for                                                      
his/her   vote,   but   the   legislator    would   still   benefit   from                                                      
legislation,   such  as a  tax  break,  or something   other  people  will                                                      
not  get.   He  said  if   the  legislator   did   not  own  a  business,                                                       
investment,   real  property,   lease,  or other  enterprise,   then  [the                                                      
language   in SB  89]  is silent.   He asked  whether   it is  okay  for  a                                                     
[legislator]    to  benefit   as  long  as   it  is  not  a  business   or                                                      
investment benefit.                                                                                                             
SENATOR    MICCICHE   responded    that   without    him  mentioning    "a                                                      
substantial class," that his answer is incomplete.                                                                              
MR.  WAYNE  agreed.  He  acknowledged   that  if  a legislator   is  going                                                      
to  be $2,000   richer  next  year  if  the  bill  passes  is  one  thing,                                                      
but  if the  bill  is  a permanent   fund  dividend   bill everyone   else                                                      
benefits,   so  he/she   would   not  need  to  declare   a  conflict   of                                                      
MR.  HUTCHINSON   explained  that  it  would  be  determined   on a  case-                                                      
by-case  basis,  which   is the  reason  for  the advisory   opinions.  He                                                      
pointed   out  that  other  avenues   exist  if  people  think  unethical                                                       
behavior   is  occurring,   such  as  censure.   Elections   and   recalls                                                      
can  remove   people  from  office,   and  sanctions   exist   for  people                                                      
who  are  unethical.    Currently,   a  particular   representative    has                                                      
ongoing sanctions with financial repercussions.                                                                                 
SENATOR   KIEHL  said,   "Not  if  you  write  those   rules  out  of  the                                                      
law. Then those avenues are not available, right?"                                                                              
MR.  HUTCHINSON   answered   no,  that   the  behavior   occurred   before                                                      
House  Bill  44  and  it  exists  to  this  day.  The  individual   member                                                      
is  still  making  payments   because   of behavior   that  was  found  to                                                      
be unethical.                                                                                                                   
2:24:23 PM                                                                                                                    
SENATOR  KIEHL  said  he  will  have to  do research   on the  member  who                                                      
was  found  to  be  unethical   without   violating   any  of  the  ethics                                                      
MR. HUTCHINSON answered that there was a violation.                                                                             
[SB 89 was held in committee.]                                                                                                  

Document Name Date/Time Subjects
SB 89 - Bill - 3 13 19.PDF SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Sponsor Statement - 3 13 19.pdf SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - PowerPoint Presentation - 3 13 19.pdf SJUD 3/18/2019 1:30:00 PM
SB 89
SB 89 - Sectional Analysis - 3 13 19.pdf SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
SB 89 - Supporting Document - AO 19 01 - 3 13 19.pdf SJUD 3/18/2019 1:30:00 PM
SJUD 3/20/2019 1:30:00 PM
SB 89
CSSB35 Version U.pdf SJUD 3/18/2019 1:30:00 PM
SB 35
CSSB35 Explanation of Changes from Version A to U.pdf SJUD 3/18/2019 1:30:00 PM
SB 35